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Report: Slow Surveillance Reform Has Cost U.S. Tech Companies Over $35 Billion

The Information Technology and Innovation Foundation (ITIF) group recently published a new report that said the U.S. tech companies have already lost $35 billion in sales due to the "failure of U.S. policymakers to address surveillance concerns" after the Snowden documents came out in 2013.

The surveillance revelations have made foreign governments worried that the American companies may also give their citizens' data too easily to U.S. law enforcement (PRISM, various "cyber-threat sharing" programs, etc). This has prompted certain countries to request American companies to keep the data on their own citizens in a local data center. For others, it has also been an excuse to have more local control over those companies as well as their citizens.

Either way, it seems all of this could have been avoided if the U.S. had stricter surveillance laws and policies and if U.S. companies were more concerned with encrypting their customers' communications and data in a way that even the companies themselves can't get it (end to end encryption).

Now, both the U.S. Congress and American companies must show just how committed they are to protecting that data against abusive surveillance before they lose even more contracts and revenue.

The ITIF group recommends the following measures to regain the trust in U.S. companies:

Increase transparency about U.S. surveillance activities both at home and abroad.Strengthen information security by opposing any government efforts to introduce backdoors in software or weaken encryption.Strengthen U.S. mutual legal assistance treaties (MLATs).Work to establish international legal standards for government access to data.Complete trade agreements like the Trans Pacific Partnership that ban digital protectionism, and pressure nations that seek to erect protectionist barriers to abandon those efforts.

The proposal about opposing efforts to introduce backdoors in U.S. technology is likely the most important one, because if foreigners find out U.S. technology has backdoors, then the revenue losses could grow at a much faster pace. It should go without saying that if U.S. products have U.S. government backdoors in them, then that won't inspire too much trust in American companies.

The U.S. government will need to take an opposite approach to encryption than it takes now. Although President Obama has said that he supports strong encryption, the FBI continues to ask for encryption backdoors in public, which only results with foreign customers trusting U.S. products even less. The U.S. government will need to be explicitly clear that it is against encryption backdoors.

The last one about the TPP agreement is probably the most controversial and is ultimately likely to be unnecessary if companies decided to protect their data in a way that even the U.S. government can't get it. In fact, that would be an even stronger measure than requiring companies to keep the data abroad, because that data can still be stolen by U.S. spy agencies if it's not protected properly. Geography, in this case, is less important than how the data itself is protected.

The ITIF group ended its report by urging U.S. policymakers to further reform surveillance laws beyond the recently passed "USA Freedom Act" in order to stop the decrease in trust in American companies and the wave of protectionist laws in other countries, which require tech companies to keep their citizens' data locally.

“If the U.S. tech industry is to remain the leader in the global marketplace, then the U.S. government will need to set a new course that balances economic interests with national security interests. The cost of inaction is not only short-term economic losses for U.S. companies, but a wave of protectionist policies that will systematically weaken U.S. technology competitiveness in years to come, with impacts on economic growth, jobs, trade balance, and national security through a weakened industrial base. Only by taking decisive steps to reform its digital surveillance activities will the U.S. government enable its tech industry to effectively compete in the global market."

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  • carnetarian
    "Complete trade agreements like the Trans Pacific Partnership that ban digital protectionism, and pressure nations that seek to erect protectionist barriers to abandon those efforts."

    Worst. Idea. Ever.
    Reply
  • Shankovich
    More like +$400 billion. More than clear that the J-20 and J-31 fighter jets are copies of the F-22 and F-35 respectively, especially considering state newspapers in 2008 boasted stealing some designs. Not as stealthy, but good enough.
    Reply
  • vern72
    This is one sector I don't mind if it tanks.
    Reply
  • kenjitamura
    "Complete trade agreements like the Trans Pacific Partnership that ban digital protectionism, and pressure nations that seek to erect protectionist barriers to abandon those efforts."

    Worst. Idea. Ever.

    At least digital protectionism keeps fiasco's like this from happening all the time:

    "As it turns out, 'Bob' had simply outsourced his own job to a Chinese consulting firm," Valentine wrote. "Bob spent less than one fifth of his six-figure salary for a Chinese firm to do his job for him."
    The worker "physically FedExed his RSA token to China so that the third-party contractor could log-in under his credentials during the workday."

    Guy working with a subsidiary under verizon had outsourced all of his labor to some Chinese guy and gave him a percentage of the six-figure salary he was making from the Chinese guys work. Turns out the man actually never did a lick of work and would just pop into the office one day a week to keep suspicion from being aroused. He spent his entire day at the office looking at youtube videos and browsing reddit when he did show up and they found this out by actually monitoring his activity after they figured it out.
    Reply
  • althex
    Guy working with a subsidiary under verizon had outsourced all of his labor to some Chinese guy and gave him a percentage of the six-figure salary he was making from the Chinese guys work. Turns out the man actually never did a lick of work and would just pop into the office one day a week to keep suspicion from being aroused. He spent his entire day at the office looking at youtube videos and browsing reddit when he did show up and they found this out by actually monitoring his activity after they figured it out.

    This is the norm in South Africa, Joe plumber quotes for services to be rendered that he can't supply for example installing computer components for a school. He then sub contracts an actual computer company to do the job at a fraction of what he's getting. This is just how things are run here.
    Reply
  • 10tacle
    More like +$400 billion. More than clear that the J-20 and J-31 fighter jets are copies of the F-22 and F-35 respectively, especially considering state newspapers in 2008 boasted stealing some designs. Not as stealthy, but good enough.

    A relative of mine worked at the Lockheed-Martin factory in Marietta, GA where the F-22 was built. According to him, it is highly unlikely China or Russia got hold of any detailed classified documents of that program (blue prints specifically). It is well known that Russia was able to copy our designs just from videos and photos, starting with their Buran space shuttle in the 1970s. More than likely this is what China did, and likely with Russian help. This is because the F-22 was developed before the global internet/world wide web took off (1980s).

    But with that said, we do know that China has hacked into US databases and gotten hold of F-35 secrets.
    Reply
  • junkeymonkey
    thay did not move too slow to cover the patriot act to gather your info with out warrant .. so in the us of a you looking to be guilty first then proven innocent on a daily basis per scanning of your correspondents.. hmmmm....

    nsa guy- '' ok he called his mom about a walmart sale so he's cleared for now ''

    just goes to show your constitution is nothing but just paper with some words on it . cause if you don't stand up and back it up who will ?


    I see folks blame snowden guy and called him a bad guy for informing you about them infringing ontn your rights and that pissed them off that were sneaking into your life behind your back with out warrant that was at one time required by law .. go figure ..

    but hes the bad guy ???
    Reply
  • 10tacle
    16026852 said:
    just goes to show your constitution is nothing but just paper with some words on it . cause if you don't stand up and back it up who will ?

    Yes and that's why we have at least one US presidential candidate for 2016 who has the guts to stand up to our government's draconian response to the 9/11 terror attacks (read: Patriot Act). That candidate's name is Sen. Rand Paul (Kentucky - Republican).

    Reply
  • junkeymonkey
    look back at big talk flag wavers - they end up doing you in the fastest .. also look back from R. Reagan to now at the amount of rights you lost I think it was stalin who said '' we will conquer America with out firing a shot''

    ther on the fast track to that today . with osoma Obama care that put us in socialist next is communist .. think your just one political party away from Fascist now ...
    Reply
  • 10tacle
    You got that right. The establishment GOP and Democrats sleep in the same beds together. Our only hope is a third party, or the Tea Party Repubs like Rand Paul. When both establishment Repubs and Dems alike lambast the Tea Party, you know something is wrong because they *both* feel threatened.

    Oh and Russia will need to get in line behind the Chinese in conquering us: China owns the lion's share of our foreign held debt.
    Reply